2017년 11월 4일 토요일

Lloyd Blankfein, the chairman and chief executive, of Goldman Sachs has claimed that bankers do "God's work".

( ... ) Speaking to ^The Sunday Times^, [Mr. Blankfein] argued: "We're very important. We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jos that create more growth and more wealth. We have a social purpose."

While he says he understands people are angry at banker's actions, ( ... ... )

Goldman Sachs is exempt from President Obama's cap on bonuses because it paid back its ￡6 billion loan from the US government. As a result the average pay this year for the bank staff will be around ￡440,000.

( ... ... ) In an presentation at the Credit Suisse 2015 Financial Service Forum, Chairman and CEO Lloyd Blankfeinㅡwho once famously said the firm was doing "God's work"ㅡmade the case that while Goldman may not have been engaged in a high-profile restructuring over the last few years, it has been undergoing a transformatin that has improved its financial position.

The chief executive of Goldman Sachs, which has attracted widespread media attention over the size of its staff bonuses, says he believes banks serve a social purpose and are "doing God's work."

“We’re very important,” Lloyd C. Blankfein said in an interview with The Times of London. “We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle.”

( ... ... ) “We have a social purpose,” he told the newspaper.

Mr. Blankfein also defended the firm’s compensation, saying that the practices correlated with long-term performance.

“Others made no money and still paid large bonuses. Some are not around anymore,” he said. “I wonder why?” He said that he understood, however, that people were angry with bankers’ actions: “I know I could slit my wrists and people would cheer.” But he is, he told The Times, just a banker “doing God’s work.”

( ... ... ) US government pumped huge amounts of cash into the lending institutions to "prime the pump." In one statement after another, before, during and after the financial meltdown of 2007-8, many major bankers adduced liquidity as the ultimate moral justificatio of the financial markets, as "God's work" in the widely cited words of Lloyd Blankfein, the chairman of Goldman Sachs.

Once we understand the logic of providing liquidity as the ethical foundation of the financial industries, it becomes possible to see that the justification of the growing variety, scale, and profitability of derivatives (including the CDS instruments that brought down the housing mortgage market) is as the most sophisticated tools for increasing liquidity in the financial markets. This liquidity, in turn, is seen as the basis of credit, investment, and growth and her "God's work" through finance meets the central tenet of neoclassical economics in this century, which is that growth is the key to market health, competitiveness, and efficiency. The invisible hand works best when it has more fingers. But for finance professionals their portion of God's work ends with the provision of liquidity. What banks, companies, and wealthy individuals with the liquidity at their disposal do is the work of another department of "God's work," which has to do with technology, efficient markets, and innovators in manufacturing and distribution. The latter are the business of economics, not of finance, at least not of finance in its most powerful and abstract forms.

In India, the God's work of derivatives was ushered in dramatically in June 2011, a full three years after CDS excesses in the mortgage market in the United States had brought the whole financial system close to total collapse. ( ... ... )

( ... ... ) But the key quote that's getting attention comes in Goldman Chief Executive Lloyd Blankfein' exchane with a reporter after a question on whether there should be limits to compensation: Is it possible to make too much money? “Is it possible to have too much ambition? Is it possible to be too successful?” Blankfein shoots back. “I don’t want people in this firm to think that they have accomplished as much for themselves as they can and go on vacation. As the guardian of the interests of the shareholders and, by the way, for the purposes of society, I’d like them to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”

( ... ... ) Blankfein's wry comment that he's "doing god's work" seems almost to be a veiled jab at this sort of religio-public relations push, which to a serious banker of Blankfein's stature, must seem somewhat silly. Blankfein clearly knows who he works for. After all, God couldn't afford him.